Financial Data and Key Metrics Changes - RBB Bancorp reported a net income of $7.2 million or $0.39 per share, a decline of $0.04 from the previous quarter's $0.43 per share [5][7] - Net interest margin decreased by 2 basis points, primarily due to the impact of $22.5 million in loans that migrated to non-accrual, which reduced interest income by $710,000 and net interest margin by 8 basis points [7][8] - Net interest income decreased by $912,000 to $24 million, with $520,000 of that decrease attributed to non-accrual loans [7][8] - Non-interest income increased slightly to $3.5 million, benefiting from distributions on an equity investment and higher gains on loan sales [8] Business Line Data and Key Metrics Changes - Loans increased by $20 million in the second quarter, supported by approximately $115 million of loan production at a weighted average rate of 7.4% [5][6] - Commercial real estate loans and construction loans remained stable at 39% and 7% of total loans, respectively [8] - The residential mortgage portfolio, valued at $1.5 billion, consists of well-secured non-QM mortgages primarily in New York and California with an average loan-to-value (LTV) of 61% [8] Market Data and Key Metrics Changes - Total deposits remained stable at $3 billion, with a successful replacement of wholesale funding with retail deposits [8] - Non-interest bearing deposits remained relatively flat for the second quarter in a row [8] - The average all-in-cost deposit for the second quarter was unchanged at 3.59% from the first quarter [8] Company Strategy and Development Direction - The company is focused on reducing non-performing loans (NPLs) and expects to settle two non-accrual loans totaling $8.1 million in the third quarter [6][8] - Management is cautiously optimistic about loan growth and net interest margin stabilization in the second half of the year, despite a challenging environment [10][31] - The company plans to continue share repurchases as the stock price remains below tangible book value, with 0.5 million shares still authorized for buyback [37] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding loan growth and net interest margin recovery, expecting increased growth in the second half of the year compared to the first half [10][31] - The increase in non-performing loans was not attributed to any specific review or audit but was part of normal banking operations [44] - Management believes they are appropriately reserved based on updated appraisals and expect to resolve troubled loans without material loss [6][44] Other Important Information - The allowance for loan losses remained stable at 1.37% of total loans held for investment, but the allowance to non-performing loans ratio decreased to 76% [8] - The company repurchased approximately 448,000 shares at an average price of $18.01 in the second quarter [8] Q&A Session Summary Question: Opportunities for loan growth and margin in the next two quarters - Management is cautiously optimistic about loan growth, expecting increased growth compared to the first half of the year, with net interest margin stabilizing [10][12] Question: Migration of non-accrual loans and common drivers - Management indicated there is no common driver for the migration of the loans that moved to non-accrual [14][15] Question: Loan sales composition and pipeline for the back half of the year - The majority of loan sales were from SBA loans, with some traction in the mortgage portfolio [17][18] Question: Expense run rate and SEC investigation - Current expenses related to remediation processes are included in the expense run rate [21][48] Question: Confidence in recouping non-performing loans without losses - Management expressed confidence based on new appraisals and proactive measures taken to resolve troubled loans [44][45]

Net Income and Earnings - Net income for Q2 2024 totaled $7.2 million, or $0.39 diluted earnings per share, compared to $8.0 million in Q1 2024[3][18] - Net income available to common shareholders for the six months ended June 30, 2024, was $15,281, compared to $21,919 in the same period in 2023[52] - Net income for the six months ended June 30, 2024, was $15.28 million, down from $21.92 million in the same period in 2023[65] - Basic net income per share for the six months ended June 30, 2024, was $0.83, compared to $1.15 in the same period in 2023[65] Net Interest Margin and Income - Net interest margin (NIM) decreased to 2.67% in Q2 2024, down 2 basis points from 2.69% in Q1 2024[3][5] - Net interest income for the second quarter of 2024 was $23.988 million, with a net interest margin of 2.67%[45] - Net interest income decreased to $48,891 in June 2024 from $66,076 in June 2023, with a net interest margin of 2.68% compared to 3.53% in the previous year[46] - Net interest income for the six months ended June 30, 2024, was $107.68 million, a decrease from $110.75 million in the same period in 2023[65] - Net interest margin was 2.67% for the quarter ended June 30, 2024, compared to 3.37% for the same period in 2023[72] Total Assets and Loans - Total assets decreased to $3.9 billion as of June 30, 2024, a $9.8 million decrease compared to March 31, 2024[10] - Loans held for investment increased by $20.4 million to $3.0 billion as of June 30, 2024, driven by growth in CRE, C&I, C&D, and SFR loans[22] - Total loans held for investment decreased to $3,015,613 in June 2024 from $3,307,157 in June 2023, with a yield of 6.05% compared to 6.14% in the previous year[46] - Total loans as of June 30, 2024, were $3,047,712, with commercial real estate loans making up 39.1% of the portfolio[49] - Net loans held for investment stood at $3,005,971 as of June 30, 2024, showing a slight decrease from $3,152,903 as of June 30, 2023[69] - Total assets decreased to $3,868,186 as of June 30, 2024, compared to $4,075,618 as of June 30, 2023, reflecting a decline of 5.1% year-over-year[69] - Total assets-GAAP declined to $3,868,186 thousand in June 2024 from $4,075,618 thousand in June 2023[77] - Tangible assets decreased to $3,794,294 thousand in June 2024 from $4,000,874 thousand in June 2023[77] Deposits and Funding Costs - Total deposits decreased by $4.7 million to $3.0 billion as of June 30, 2024, with noninterest-bearing deposits increasing by $3.5 million to $543.0 million[23] - Total cost of deposits for the second quarter of 2024 was $26.803 million, with a cost of 3.59%[45] - Total cost of funds for the second quarter of 2024 was $28.921 million, with a cost of 3.54%[45] - Total interest-bearing deposits increased to $2,531,686 in June 2024 from $2,427,265 in June 2023, with a cost of 4.34% compared to 3.13% in the previous year[46] - Total deposits slightly decreased to $3.02 billion as of June 30, 2024, compared to $3.03 billion in March 2024 and $3.18 billion in June 2023[60] - Noninterest-bearing demand deposits accounted for 18.0% ($542.97 million) of total deposits as of June 30, 2024, compared to 17.8% ($539.52 million) in March 2024 and 18.4% ($585.75 million) in June 2023[60] - Time deposits over $250,000 increased to $790.48 million (26.1% of total deposits) as of June 30, 2024, compared to $746.61 million (24.7%) in March 2024 and $662.76 million (20.9%) in June 2023[60] - Total deposits were $3,023,605 as of June 30, 2024, down from $3,175,416 as of June 30, 2023, a decrease of 4.8%[69] - Cost of average total deposits was 3.59% for the quarter ended June 30, 2024, up from 2.80% in the same period last year[72] Credit Quality and Allowances - Substandard loans increased to $63.1 million, or 2.07% of total loans, as of June 30, 2024, up from $57.2 million, or 1.89% of total loans, in Q1 2024[13] - The allowance for credit losses totaled $42.4 million as of June 30, 2024, with the allowance for loan losses as a percentage of nonperforming loans decreasing to 76% from 116% in Q1 2024[14] - Nonperforming assets increased to $54.6 million, or 1.41% of total assets, as of June 30, 2024, up from $37.0 million, or 0.95% of total assets, as of March 31, 2024[35] - 30-89 day delinquent loans decreased by $9.7 million to $11.3 million as of June 30, 2024, compared to $21.0 million as of March 31, 2024[36] - Special mention loans decreased to $19.52 million (0.64% of total loans) as of June 30, 2024, compared to $20.58 million (0.68%) in March 2024 and $24.15 million (0.76%) in June 2023[58] - Substandard loans increased to $63.08 million (2.07% of total loans) as of June 30, 2024, compared to $57.17 million (1.89%) in March 2024 and $74.07 million (2.32%) in June 2023[58] - Nonperforming loans rose to $54.59 million (1.79% of total loans) as of June 30, 2024, compared to $35.94 million (1.19%) in March 2024 and $41.86 million (1.31%) in June 2023[58] - Net charge-offs increased to $551,000 (0.07% of average loans) for the quarter ended June 30, 2024, compared to $184,000 (0.02%) in March 2024 and $580,000 (0.07%) in June 2023[58] - Allowance for loan losses to nonperforming loans decreased to 76.46% as of June 30, 2024, compared to 116.01% in March 2024 and 102.94% in June 2023[58] - Provision for credit losses for the six months ended June 30, 2024, was $557,000, down from $2.39 million in the same period in 2023[65] Shareholder Equity and Share Repurchases - Total shareholders' equity decreased by $2.7 million to $511.3 million as of June 30, 2024, compared to March 31, 2024, due to dividends paid and share repurchases[37] - The company repurchased 448,190 shares of common stock for $8.1 million during Q2 2024[3] - The company repurchased 448,190 shares at a weighted average share price of $18.01 during the second quarter of 2024[38] - Total shareholders' equity increased to $511,291 thousand as of June 30, 2024, compared to $500,290 thousand in June 2023[77] - Tangible common equity decreased slightly to $437,399 thousand in June 2024 from $439,894 thousand in March 2024[77] - Common equity to assets ratio improved to 13.22% in June 2024 from 12.28% in June 2023[77] - Tangible common equity to tangible assets ratio increased to 11.53% in June 2024 from 10.64% in June 2023[77] - Common shares outstanding decreased to 18,182,154 in June 2024 from 18,995,303 in June 2023[77] Noninterest Income and Expense - Noninterest income increased to $3.5 million in Q2 2024, up $116,000 from Q1 2024, driven by higher gains on sale of loans and equity investment income[7] - Total noninterest income for the six months ended June 30, 2024, increased to $6.86 million from $4.86 million in the same period in 2023[65] - Total noninterest expense for the six months ended June 30, 2024, decreased to $34.09 million from $37.43 million in the same period in 2023[65] Book Value and Tangible Equity - Book value per share increased to $28.12 as of June 30, 2024, up from $27.67 at March 31, 2024[3] - Tangible common equity to tangible assets ratio stood at 11.53% as of June 30, 2024, compared to 11.56% in March 2024 and 10.64% in June 2023[58] - Book value per share increased to $28.12 as of June 30, 2024, from $26.34 as of June 30, 2023[72] - Tangible book value per share rose to $24.06 as of June 30, 2024, compared to $22.40 as of June 30, 2023[72] - Book value per share rose to $28.12 in June 2024 from $26.34 in June 2023[77] - Tangible book value per share increased to $24.06 in June 2024 from $22.40 in June 2023[77] Interest Expense and Yields - Total interest expense for the six months ended June 30, 2024, increased to $58.84 million from $44.73 million in the same period in 2023[65] - Interest on savings deposits, NOW, and money market accounts for the six months ended June 30, 2024, was $9.43 million, up from $5.07 million in the same period in 2023[65] - Interest on time deposits for the six months ended June 30, 2024, was $45.17 million, compared to $32.58 million in the same period in 2023[65] - Total interest-earning assets decreased to $3,667,597 in June 2024 from $3,770,997 in June 2023, with a yield of 5.91% compared to 5.93% in the previous year[46] Efficiency and Ratios - Efficiency ratio increased to 62.38% for the quarter ended June 30, 2024, from 53.80% in the same period last year[72] - Return on average tangible common equity was 7.01% for the six months ended June 30, 2024, compared to 10.49% in the same period in 2023[52] - Return on average assets, annualized, was 0.76% for the quarter ended June 30, 2024, compared to 1.08% for the same period in 2023[72] - Return on average shareholders' equity, annualized, was 5.69% for the quarter ended June 30, 2024, down from 8.78% in the same period last year[72] - Tier 1 leverage ratio increased to 12.48% as of June 30, 2024, compared to 12.16% in March 2024 and 11.60% in June 2023[58]

(1) Includes brokered deposits, collateralized deposits from the State of California, and internet listing services. | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------|---------------|-------|----------------|-------|---------------|-------| | (dollars in thousands, except share and per share data) | June 30, 2024 | | March 31, 2024 | | June 30, 2023 | | | Tangible common equity: | | | | | | | | Total shareholders' equity | $ 511,291 | | $ 513,986 | | $ 50 ...

Core Viewpoint - RBB has demonstrated strong earnings performance, exceeding consensus estimates in recent quarters, indicating positive momentum in its financial outlook [1][8]. Earnings Performance - For the last reported quarter, RBB achieved earnings of $0.43 per share, surpassing the Zacks Consensus Estimate of $0.35 per share by 22.86% [1]. - The company has consistently beaten earnings estimates, averaging a 22.86% surprise over the last two quarters [8]. Earnings Expectations - RBB currently holds an Earnings ESP of +7.46%, suggesting analysts are optimistic about the company's future earnings prospects [3]. - The next earnings report for RBB is anticipated to be released on July 22, 2024 [3]. Industry Position - RBB is positioned within the Zacks Banks - West industry, which may provide a favorable context for its earnings performance [4]. - The stock's positive Earnings ESP, combined with a Zacks Rank of 3 (Hold), indicates a potential for continued earnings beats [5]. Analyst Insights - Estimates for RBB have been trending higher, reflecting the company's history of earnings surprises [5]. - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% success rate in beating consensus estimates [9].

RBB Bancorp (RBB) shares ended the last trading session 5.1% higher at $20.68. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 15.3% gain over the past four weeks. This is a positive development for banks that have been reeling under the Fed's aggressive monetary tightening. As the rates come down, so will banks' funding costs. Also, demand for loans is expected to improve. Hence, the investors turned bullish on ba ...

Core Viewpoint - RBB Bancorp, a community-based financial holding company, is set to release its financial results for the second quarter of 2024 on July 22, 2024, after market close [5]. Company Overview - RBB Bancorp is headquartered in Los Angeles, California, with total assets of $3.9 billion as of March 31, 2024 [2]. - The company operates through its wholly-owned subsidiary, Royal Business Bank, which provides a range of banking services primarily to Asian communities across various locations including Los Angeles County, Orange County, Ventura County, Las Vegas, New York, New Jersey, Illinois, and Hawaii [2]. - The Bank offers services such as remote deposit, E-banking, mobile banking, various types of loans, trade finance, and wealth management [2]. - The company has multiple branches across several states, including nine in Los Angeles County and additional locations in New York, New Jersey, Illinois, and Hawaii [2]. Conference Call Information - A conference call is scheduled for July 23, 2024, at 11:00 a.m. Pacific Time to discuss the financial results [3]. - Interested parties can access a live webcast of the call on the company's website, which will also be available for replay shortly after the call [6].

Core Viewpoint - RBB Bancorp will release its financial results for the second quarter of 2024 on July 22, 2024, after market close [1] Financial Results Announcement - The conference call to discuss the financial results will take place on July 23, 2024, at 11:00 a.m. Pacific Time [2] - Interested parties can access the call by dialing specific numbers and using a passcode, with a replay available after the call [2] - A live webcast of the call will also be available on the Company's website, with a recording accessible shortly after the call [3] Corporate Overview - RBB Bancorp is a community-based financial holding company based in Los Angeles, California, with total assets of $3.9 billion as of March 31, 2024 [4] - The Bank provides a range of business banking services primarily to Asian communities across various locations in California, Nevada, New York, New Jersey, Illinois, and Hawaii [4] - The Bank operates multiple branches across these regions, including nine in Los Angeles County and additional branches in other states [4]

Financial Performance - For the quarter ended March 31, 2024, net income was $8.0 million, or $0.43 diluted earnings per share, down from $12.1 million, or $0.64 per share in the previous quarter[185]. - Net income for the three months ended March 31, 2024, was $8.0 million, down from $12.1 million for the same period in 2023[197]. - Basic earnings per share decreased to $0.43 for the three months ended March 31, 2024, down from $0.64 for the previous quarter[197]. - Net interest income for Q1 2024 was $24.9 million, a decrease of $9.2 million from $34.1 million in Q1 2023, driven by higher interest expense of $10.3 million[210]. - Noninterest income for Q1 2024 was $3.4 million, a decrease of $4.0 million from $7.4 million in Q4 2023, primarily due to the absence of a $5.0 million CDFI ERP award recognized in Q4 2023[217]. - Total noninterest expense increased to $16.97 million in Q1 2024, up $576,000 from $16.39 million in Q4 2023[223]. Asset and Liability Management - Total assets decreased by $148.0 million, or 3.7%, to $3.9 billion from $4.0 billion at December 31, 2023, primarily due to a $162.1 million decrease in cash and cash equivalents[186]. - Total liabilities decreased by $150.7 million to $3.4 billion at March 31, 2024, primarily due to a $146.4 million decrease in deposits[279]. - Total deposits decreased by $146.4 million, or 4.6%, to $3.0 billion as of March 31, 2024, primarily due to a decline in interest-bearing deposits[189]. - Total interest-bearing liabilities were $2,873.0 million with an average cost of 4.19% for Q1 2024[205]. - The total cost of deposits was $3,117.2 million with a cost of 3.59% for Q1 2024[208]. Loan Portfolio - Total loans held for investment decreased by $4.5 million, or 0.15%, to $3.0 billion at March 31, 2024, with notable decreases in single-family residential mortgages and commercial and industrial loans[188]. - The loan-to-deposit ratio increased to 98.6% at March 31, 2024, compared to 94.2% at December 31, 2023[188]. - Single-family residential (SFR) mortgage loans represent approximately 50% of total loans as of March 31, 2024, with a balance of $1.46 billion[246]. - The loan portfolio composition includes 6.5% in construction and land development, 38.9% in commercial real estate, 48.4% in SFR mortgages, 4.0% in commercial and industrial loans, and 1.8% in SBA loans as of March 31, 2024[246]. - The total loans HFI at the end of the period were $3.027 billion, down from $3.342 billion at the end of 2023[265]. Credit Quality - The allowance for loan losses (ALL) as a percentage of loans held for investment (HFI) was 1.38% as of March 31, 2024, unchanged from December 31, 2023[192]. - The company recorded no provision for credit losses in Q1 2024, compared to a provision of $2.0 million in Q1 2023, reflecting improved credit quality metrics[215]. - Nonperforming assets totaled $37.0 million, or 0.95% of total assets, as of March 31, 2024, an increase from $31.6 million or 0.79% at December 31, 2023[270]. - The company reported net charge-offs to average loans HFI of 0.02% for the three months ended March 31, 2024, compared to 0.10% for the twelve months ended December 31, 2023[264]. Capital and Equity - Total shareholders' equity increased by $2.7 million to $514.0 million compared to December 31, 2023, driven by net earnings of $8.0 million[193]. - Shareholders' equity increased by $2.7 million, or 0.5%, to $514.0 million as of March 31, 2024, from $511.3 million at December 31, 2023, driven by net earnings of $8.0 million and stock option exercises of $541,000[295]. - The tangible common equity to tangible assets ratio was 19.10% as of March 31, 2024, compared to 19.07% at December 31, 2023[302]. - The company exceeded all regulatory capital requirements under Basel III, with a total risk-based capital ratio of 25.91% as of March 31, 2024[302]. Interest Rate Sensitivity - The net interest margin for Q1 2024 was 2.69%, compared to 2.73% in Q4 2023[208]. - Net interest margin decreased to 2.69% for Q1 2024, down 101 basis points from 3.70% in Q1 2023, primarily due to a 157 basis point increase in the cost of interest-bearing deposits[211]. - Net interest income sensitivity showed a dollar change of $9,640,000 with a 100 basis point decrease in rates, representing a 9.1% change[321]. - Economic Value of Equity (EVE) is expected to decrease in both up and down rate scenarios, indicating sensitivity to interest rate changes[324]. Operational Efficiency - The efficiency ratio increased to 60.07% for the three months ended March 31, 2024, compared to 49.58% for the previous quarter[197]. - The average interest rate on total interest-bearing deposits increased to 4.32% for the three months ended March 31, 2024, compared to 3.56% for the year ended December 31, 2023[281]. - Noninterest expense for Q1 2024 was $17.0 million, an increase of $576,000 from Q4 2023, primarily due to higher salaries and employee benefits expenses of $1.1 million[224]. Investment Portfolio - Available for sale investment securities totaled $335.2 million, with a pre-tax net unrealized loss of $30.2 million due to higher market interest rates[187]. - The weighted-average book yield on the total investment portfolio at March 31, 2024, was 4.16%, compared to 4.00% at December 31, 2023[235]. - The total available for sale securities amounted to $335.194 million with a weighted average yield of 4.27% as of March 31, 2024[240]. - The company actively monitors its investment portfolio to ensure adequate credit support and identify potential credit impairment[231].

RBB Bancorp (NASDAQ:RBB) Q1 2024 Earnings Conference Call April 23, 2024 2:00 PM ET Company Participants Catherine Wei - Investor Relations Officer David Morris - Chief Executive Officer Johnny Lee - President Lynn Hopkins - Chief Financial Officer Jeffrey Yeh - Chief Credit Officer Gary Fan - Chief Administrative Officer Vincent Liu - Chief Risk Officer Conference Call Participants Nathan Race - Piper Sandler Erik Zwick - Hovde Group Operator Good day, ladies and gentlemen. And welcome to the RBB Bancorp F ...

April 22, 2024 RBB Bancorp Disclosure Statement Non-GAAP Financial Measures Certain financial information in this presentation has not been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and is presented on a non-GAAP basis. Investors should refer to the reconciliations included in this presentation and should consider the Company's non-GAAP measures in addition to, not as a substitute for or superior to, measures prepared in accordance with GAAP. These measures may not b ...